#FactoringForTruckingCompanies, #FreightFactoring, #InvoiceFactoring, #FactoringForTruckers, #Factoring,
English businessman, Sir Richard Branson stated “Never take your eyes off the cash flow because it's the life blood of business.” As the founder of the Virgin Group in the 1970s, which controls more than 400 companies in various fields, Branson definitely knows about cash flow.
It’s not uncommon for truckers to typically wait 30, 60, 90 days or longer after loads have been delivered to receive payment. This creates a serious cash flow problem where most smaller companies can’t afford to wait that long.
A lack of cash reserves on hand leads to concerns meeting your own mounting expenses such as fuel, maintenance, tires, loan payments, insurance and payroll. Unfortunately your vendors will not wait 1, 2, or 3 months for their payments.
Feeling between a rock and a hard place you have a choice of solutions such as factoring and Quick Pay. Quick Pay is a service offered by most brokers, not to be confused with the service of the same name offered by major banks such as Chase.
What Is Quick Pay?
Quick Pay is when a broker advances the trucking company for an invoice in exchange for a small fee. Quick Pay is convenient because you can get paid anywhere from 1-7 days after the load is delivered. Brokers charge a fee of 1-5% depending on how fast you would like to be paid. This would appear to be better than waiting a month or longer for funds.
The Downside Of Quick Pay
You can’t help thinking that brokers use the 30, 60 or 90 terms as a scare tactic so they can charge you 5% to get paid tomorrow. If they can pay 95% tomorrow why won’t they pay you 100% today? The answer is Quick Pay has become another profit center for the broker at your expense. The net result is payment will never be made quickly unless you discount the freight bill.
If brokers know you’ll be utilizing Quick Pay for loads they realize that cash flow may be a problem. That puts you at a disadvantage to the point where the broker offers less than market value for future loads believing you need the income. Now you are back in the same predicament where the broker will “threaten” to drag out payment unless you accept less through Quick Pay.
Quick Pay is a little one-sided, don’t you think?
The Quick Pay fee may not be the only expense involved. Some brokers stipulate that checks will be issued and then charge an additional fee for that. Of course, if it’s mailed while you’re on the road it may be sometime before physically getting your hands on the check.
Some brokers use Comchek from Comdata which is a simple and trusted way to send money when cash isn’t available or suitable. A Comchek may be cashed at selected truck stops who may charge additional processing fees which increase with higher payment amounts.
Make sure you read the fine print. These fees start adding up, don’t they?
The Real Benefits Of Factoring Over Quick Pay
Each broker have their own rates, policies and procedures and can only offer Quick Pay on their own loads. That means working with multiple brokers you will have multiple freight bill submissions along with multiple payment processes to track and manage. Less profit, more paperwork!
At the risk of tooting our own horn, factoring is the all round better and easier solution. Our rates are comparable to Quick Pay fees and payment is made by direct deposit into your bank account within 12 hours. No waiting on checks and making trips to the bank.
We can handle any or all freight bills from multiple brokers and track all payments on your behalf as part of our service. That means far less paperwork for you!
Sometimes it would seem that brokers are working against the profitability of truckers, whereas we are working with you to grow your business and profits. The more success our clients obtain the more we grow, therefore it’s in our best interest to service clients to the best of our ability.
Nothing To Lose -Try Factoring For One Month!
Michael Dell, founder, chairman and CEO of Dell Technologies, one of the world's largest technology infrastructure companies, agrees with Branson by recalling, "We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas."
Contact Us Today!
Call us today if you’re running out of financial gas! Remember we only have month-to-month agreements, so you sample our service at no risk. If, for any reason you are unhappy you can leave. We doubt it, but the choice is yours!
Faster freight bill payments are not on the horizon but just around the corner in a few hours.
Comentários